The state of Maine owes over a quarter-billion dollars to individuals and businesses — but despite the financial crisis, many Mainers don’t know they have money due.
The state’s Unclaimed Property Office, a sort of lost-and-found for financial assets, on Wednesday was ready to pay out a total of $276 million to the rightful owners. That sum can change daily, but is steadily increasing.
The money comes from a wide variety of sources. Bank accounts, stock shares and life insurance policies that have been lost or abandoned. Unpaid wages, uncashed checks, unredeemed refunds. The Unclaimed Property Office doesn’t handle things like real estate and cars, although it does sometimes deal with safe deposit box contents.
Like the public collections of odds and ends you might check for a misplaced umbrella, the office, overseen by Maine State Treasurer Henry Beck, is a go-to source for wayward assets. A state database of them is available for anyone to check for free by entering a few words at maineunclaimedproperty.gov.
Brad Hallowell, a finance administrator who lives in Waterville, has been reunited with stray checks from two previous jobs in recent years via the UPO. One check was for $50, the other was worth $300 to $400, Hallowell recalled.
“I’m sure I ended up spending them on something frivolous, but they were really a pleasant surprise,” he told Mainebiz.
Over the last fiscal year, which ended in June, the office paid 30,642 claims, breaking an all-time high by about 1,000, and returning $17.1 million. The average claim amount was $560, but one lucky Mainer received a check for $831,400.
“We’re very good at finding owners and paying things out quickly,” Beck said in an interview.
The Unclaimed Property Office is more than a public service, however; the office provides a revenue stream for the state of Maine.
During the 2020 fiscal year the state received $28.3 million in unclaimed assets, submitted by businesses and other “holders” that are legally required to remit them after a period of inactivity that ranges from one to three years. The UPO then starts tracking down owners.
Eventually, after paying claims, the state moves some of the remaining assets through a legal process called escheatment to the General Fund, where they help handle ongoing expenses.
“It’s a revenue function, although it’s not the primary function” of the UPO, Beck said.
But Maine acts only as an administrator of the assets and still remains liable for all of them. Some of the state’s unclaimed assets have been sitting on the books since 1980.
“The liability is there forever,” he said. “If you have something unclaimed from 50 years ago, it’s still payable.”
Fortunes to be found
Nationwide, it’s estimated that states are holding between $60 billion and $80 billion in orphaned funds. Some states have more than others, and it’s not just because of population size.
For example, Delaware, a state with under 1 million residents but where many companies are incorporated, takes in more than $400 million a year in unclaimed property revenue. It’s the third-largest source of income for the state, and represents about 10% of its revenue stream, according to 2019 data.
In February, financial website SmartAsset estimated the value of unclaimed property in each state on a per capita basis. Although the calculations were rough, and it’s difficult to make an apples-to-apples comparison, SmartAsset ranked Maine No. 10 in the U.S., with unclaimed property worth $151 per resident.
Using more current data, that ranking might move up to No. 5.
As governments grapple with the economic costs of the pandemic, some experts wonder if states will look to use more of their unclaimed property to cover expenses.
In November, the National Law Review wrote: “With the anticipated deficits caused by the pandemic, including decreased state income taxes and increased spending, it is anticipated that states will step up their enforcement of the escheatment laws.”
In the wake of the 2008-2009 recession, the journal noted, states aggressively exercised their escheatment rights — increasing the amount of their holdings from $32.8 billion in 2010 to over $43 billion in 2013.
In Maine, Beck said he and the Unclaimed Property Office are becoming “a bit more aggressive” in enforcing the requirement for businesses to turn over unclaimed property to the state.
Still, the office is trying to accommodate the holders where it can.
“We make a lot of effort to educate holders about their obligation to comply, and we’re willing to engage with them,” Beck said. “But we’re not the IRS or the FBI.”
